Supreme Court Upholds Preemption Protection for PMA Devices
Lockard |
On February 20, the U.S. Supreme Court handed Medtronic Inc. (Minneapolis) a resounding victory in a much-watched and long-fought product liability dispute. In issuing their landmark decision, the justices established a new level of legal protection for medical devices cleared to market via the premarket approval (PMA) path.
Victoria Davis Lockard, a partner in the law firm of Alston & Bird LLP (Atlanta), says the Riegel decision represents a watershed event for the medical device industry. “Not only will it limit the number of lawsuits, but it will allow for more certainty and consistency in the standards by which these devices are judged to be safe,” she says. [More]
Midwest Medtech Firms Garner Increased Investor Attention
Shah |
The Midwest continues its emergence as a hotbed for medical device innovation and start-up activity. In 2007, many of the region’s medtech companies attracted significant levels of venture capital, while others completed successful public offerings or were acquired by strategic partners. These recent regional successes have attracted the attention of healthcare investors across the country.
In 2007, 49 medical device start-ups across the Midwest raised $329 million from venture capitalists, according to a recent report from BioEnterprise (Cleveland). Overall, financed companies reflected a wide array of medical device sectors, mirroring the region’s broad industry base. In this article, Baiju R. Shah, president of BioEnterprise, provides an overview of medtech investment activity in the Midwest. [More]
Will CMS Reimbursement Spur the Artificial Heart Market?
Weems |
Countermanding a policy that has existed for more than two decades, earlier this month the Centers for Medicare and Medicaid Services (CMS; Baltimore) announced a proposed policy to provide Medicare reimbursement coverage for artificial heart devices. A final ruling on CMS coverage of artificial heart devices for Medicare beneficiaries who are enrolled in FDA-approved studies will be made by May 1.
Explaining its policy reversal, CMS said that there is now sufficient scientific evidence on the use of artificial hearts to allow coverage in carefully controlled clinical environments, which will enable the agency to provide faster and more effective rulings through informed decision making. Kerry Weems, acting CMS administrator, observed that the revised policy “relaxes a long-standing noncoverage policy, gives access to our beneficiaries, and promotes evidence development through FDA-approved studies of this advanced technology.” [
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Battle Heats Up over Proposed FDA Budget
Grossman |
Earlier this month, the Bush administration announced a proposed FDA budget of $2.4 billion for the 2009 fiscal year, an increase of $129.7 million, or 5.7%, over fiscal year 2008 funding. Under the president’s proposal, the Center for Devices and Radiological Health (CDRH; Rockville, MD) would receive $290.9 million—an increase of $7.14 million, or 2.5%, over current funding.
Describing the administration’s budget proposal as “not only inadequate, but barely half of what FDA needs just to keep pace with inflation,” the Alliance for a Stronger FDA (Silver Spring, MD) is calling for “budget levels that strengthen the agency and reflect the realities documented by a number of recent assessments.” Commenting on the administration’s proposed funding for FDA’s medical device related activities, Steven Grossman, deputy executive director of the Alliance for a Stronger FDA, says, “CDRH doesn’t do so well in this budget. Nobody does, but CDRH does particularly poorly.”
Yet, while many advocacy groups joined the alliance in taking a hard-line position on the Bush budget proposal, the two leading medtech industry associations—which are both alliance members—offered more measured responses. [More]
Life Sciences Venture Capital Investments Hit Record Levels in 2007
Slone |
In 2007, the medical device and biotechnology industries attracted $9.1 billion in venture capital investment across 862 deals. These figures represent an all-time record for annual venture capital investment in the combined life sciences, as well as a notable increase over 2006 investments of $7.6 billion across 786 deals. Although medical devices and biotechnology both experienced double-digit gains over the prior year, the most significant growth was seen in the medical device industry. In 2007, venture capital investments in medical device companies rose 40% over 2006 figures.
“In 2007, the number of deals for medical devices in total dollars was at an all-time high and reached 57% above the bubble peak of 2000,” says Kelly Slone, director of the National Venture Capital Association Medical Industry Group (Arlington, VA). During 2007, says Slone, medical device companies were involved in 385 deals with an investment total of $3.9 billion. [More]
New Studies Defend Medical Device Pricing Practices
Hahn |
The findings of two new studies call into question the necessity and likely effectiveness of proposed legislation targeting the pricing practices of medical device manufacturers. The studies, both funded by industry association AdvaMed (Washington, DC), defend current medical device pricing procedures as being effective and necessary in promoting optimal patient care at a reasonable price.
One of the studies specifically targets the Transparency in Medical Device Pricing Act (S 2221), which was cointroduced in October 2007 by Senators Arlen Specter (R–PA) and Charles Grassley (R–IA). If the bill becomes law, it would require medtech manufacturers seeking payment under Medicare and related programs to issue quarterly reports on the average and median sales prices for all of their implantable medical devices used in inpatient and outpatient procedures. Advocates of the legislation contend that greater price transparency would serve as a way to empower patients and bring down healthcare costs. However, the authors of the new study concluded that the pending legislation is unlikely to have the intended beneficial effect.
“We found that mandatory price disclosure, as proposed in S 2221, is unlikely to benefit patients or hospitals and, worse, will likely increase costs,” said study author Robert W. Hahn, who serves as executive director of Reg-Markets Center (Washington, DC) and a senior fellow at the American Enterprise Institute (Washington, DC). [More]
